In the last few years, Vietnam has seen an influx of entrepreneurs moving to the country and set up their own businesses here. The Vietnamese government has increasingly amended legislation to facilitate foreigners to incorporate and operate their companies here. A joint-stock company is a popular type often incorporated by foreign investors.
A joint-stock company in Vietnam
A joint-stock company is a type of business referred to in Vietnamese legislation as a shareholding company in which shares are owned by shareholders and flexibly transferable between shareholders. A joint-stock company exists as a separate legal entity from its shareholders, so its owners are not liable for the company.
Benefits of incorporating a joint-stock company
- Foreigners investing in a joint-stock company can enjoy a limited liability regime. Only the company’s assets can be sold off to pay its own debts, the shareholders’ assets are protected and cannot be made to pay up.
- The shares of a joint-stock company are transferable. Once going through the incorporation process, existing shares can be transferred to another person or new shares can be issued anytime. Transferability and issuance of shares allows a joint-stock company to easily add shareholders or increase its capital and shareholders are flexible to make transactions on their shares.
- A joint-stock company has perpetual succession which means its life is not affected by the life of its shareholders. Despite the shareholders’ death, retirement or the like, the company will exist and operate until it is liquidated or dissolved under Vietnamese laws.
Founding shareholders, shareholders, and directors in a joint-stock company
Both local persons and foreigners may set up a joint-stock company in Vietnam. That means foreigners may also be founding shareholders of a joint-stock company. The minimum number of shareholders in a joint-stock company is 03 (three) and there is no limit on the maximum number. The shareholders of a Vietnamese joint-stock company can be either corporations or individuals, either Vietnamese or foreign, and 100% foreign ownership is also allowed.
Similar to shareholders, the director of a Vietnamese joint stock company may be of any nationality. Besides, there is no requirement to appoint a local resident to be a deputy director. A joint-stock company can have 01 (one) director and as many deputy directors as you decide for your company’s structure.
Unlike other jurisdictions, Vietnamese Law does not require a company secretary in the organizational structure of a joint-stock company. Therefore, you can choose whether to appoint a secretary or not, depending on your demand.
Procedures for incorporating a joint-stock company
To set up a joint-stock company in Vietnam, first of all, you must choose your company name. To be approved, the name of your joint-stock company must not be identical or similar to a registered name. After that, provide us with other details for preparing application documents for you, then provide us with the signed documents and your passport.
Once we receive all signed application documents, the filing of the joint-stock company incorporation will be made online and in hard copy.
A filing fee of US$ 15 will be payable to the local company registration agency named Department of Planning and Investment (DPI) at the time of registration a joint-stock company.
The whole process can be made in about 3 weeks, i.e. the first 2 weeks for obtaining an Investment Registration Certificate and the remaining 1 week for obtaining an Enterprise Registration Certificate (similar to Certificate of Incorporation in other jurisdictions all over the world).
It usually takes us about 01 (one) month to finish all necessary procedures and make you receive your joint-stock company kit.
Notes for foreigners incorporating a joint-stock company in Vietnam
The following points should be taken into consideration if a foreigner plans to incorporate a joint-stock company in Vietnam:
- Vietnamese Law does not prevent foreign investors from registering a joint-stock company in Vietnam by themselves. However, if you want to save as much time as possible to focus on your own business, you’d be better off engaging a local incorporation agency to help out.
- Remote Registration: By engaging a professional incorporation agency like LTS LAW FIRM, you do not need to visit Vietnam to complete your joint-stock company incorporation, just provide details as required and sign the application documents and send them back to us for registration.
- Oversea Operation: When managing a joint-stock company as a foreigner, you can choose to operate your company yourselves or hire a director to manage its day-to-day business activities. In the latter case, you can operate your company overseas and sometimes visit Vietnam to attend meetings if necessary.
Costs and packages for joint-stock company incorporation
LTS LAW provides professional services of setting up a joint-stock company in Vietnam which are arranged in flexible packages. Please find our packages here and tailor the packages to best suit your needs.